Research On The Influence Of Introducing Foreign Strategic Investors On The Risk-taking Of City Commercial Banks In China

In the past two years,the COVID-19 pandemic has raged around the world,the international political and economic environment has undergone major changes,international capital flows have undergone new changes,and the domestic economy has increased downward pressure.Faced with the triple pressure of "shrinking demand,supply shocks,and weakening expectations".Under the new environment,it is of great practical significance to study the influence of foreign strategic investors on Chinese banks.Previously,many scholars have studied the impact of foreign strategic investors on Chinese banks from the perspectives of performance,corporate governance,and risk-taking,but little has been done on city commercial banks.This paper will study the impact of foreign strategic investors on Chinese city commercial banks from the perspective of risk-taking.This paper analyzes the motivation and course of the introduction of foreign strategic investors by Chinese city commercial banks,and discusses the risk status of city commercial banks.Then,using the equity balance theory and principal-agent theory to analyze the positive and negative impact mechanisms of foreign strategic investors on the risk-taking of city commercial banks.This paper further analyzes the heterogeneous impact of the introduction of foreign strategic investors on the risk-taking of city commercial banks in different economic development levels as well as listed and unlisted city commercial banks.Based on the above theoretical analysis,this paper uses the non-performing loan ratio and Z value as proxy variables for risk taking,respectively representing the credit risk and operational risk of city commercial banks.Based on the unbalanced panel data of 119 city commercial banks from 2011 to 2020,a two-way fixed effect model is constructed to empirically analyze the relationship between the shareholding ratio of foreign strategic investors and the risk-taking of city commercial banks.Furthermore,the mediation effect model is used to further study the mediation effect of foreign strategic investors on the credit risk of city commercial banks.The research results show that: First,the higher the shareholding ratio of foreign strategic investors,the greater the credit risk of city commercial banks,and has no significant impact on operational risks,and foreign strategic investors mainly increase the credit risk of city commercial banks by expanding the loan scale of foreign investment banks.Second,for city commercial banks in relatively developed regions,the introduction of foreign strategic investors will not increase the bank’s credit risk and operational risk;for city commercial banks in relatively underdeveloped regions,the higher the proportion of foreign shareholding,the higher the credit risk of city commercial banks.and greater business risk.Third,for listed city commercial banks,the higher the foreign shareholding ratio,the smaller the bank credit risk,and the less significant impact on business risk;for non-listed city commercial banks,the higher the foreign shareholding ratio,the lower the bank credit risk and operational risk.The greater the risk.Based on the above research results,three policy suggestions are put forward:first,Chinese city commercial banks should prudently introduce foreign strategic investors and guard against bank management control;second,we should increase supervision of non-listed banks,improve information disclosure mechanisms and regulate companies governance;third,refine the formulation of relevant policies for Chinese commercial banks to introduce foreign strategic investors.